Modelling the dividend policy of banks in Gulf Cooperation Council countries

Jasim Al-Ajmi

Applied Economics Letters, 2010, vol. 17, issue 14, 1423-1428

Abstract: This article presents the results of an investigation on the determinants of banks' dividend decisions among banks listed on seven stock exchanges in the Gulf Cooperation Council countries. The results show that dividend decisions are determined by current earnings and lagged dividends and that only banks in Abu Dhabi resist curtailing/skipping dividend payments. The results are mixed as to the role of dividend decisions in reducing agency problems and as a signalling device, but the results offer strong support for the transaction cost hypothesis.

Date: 2010
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DOI: 10.1080/13504850903018697

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